Bank of Ireland to raise €3.4bn

Bank of Ireland could see the stake owned by the Irish State rise slightly to 36% after it unveiled a well-flagged €3.4bn capital raising.The proposals include an institutional placing to raise €0.5bn, a placing to the Irish government worth €1.04bn and a rights issue of up to €1.89bn. The fund raising will see State ownership rise to a maximum 36%, compared with the current fully diluted level of 34%.After the capital injection, Bank of Ireland's pro forma equity tier 1 ratio rises from 5.3% to 8.0% including the €12.2bn loans expected to transfer to the Irish toxic loan scheme NAMA at 31 December 2009.The bank?added that trading still remains difficult with net interest income under pressure from the low interest rate environment, competition on deposit pricing, the higher cost of wholesale funding and low levels of new business activity.Losses on its non-NAMA-bound loan portfolios still look to have have peaked, it added, with losses on these portfolios for the three year period to 31 March 2011 within previous guidance of €4.7bin.last month, Bank of Ireland posted underlying losses of €3bn in the nine months to end 2009 after it wrote down the value of loans to customers by more than €4bn.